UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`MICROSTRATEGY, INC.
`
`Petitioner,
`
`V.
`
`Patent of ZILLOW, INC.
`Patent Owner.
`
`Case IPR2013-00034
`
`Patent No. 7,970,674
`
`PRELIMINARY PATENT OWNER RESPONSE
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`TABLE OF CONTENTS
`
`INTRODUCTION........................................................................................... 1
`
`BACKGROUND ............................................................................................. 5
`
`BRIEF DESCRIPTION OF THE PRIOR ART ............................................. 7
`
`II.
`
`III.
`
`A. The Dugan Patent ....................................................................................... 7
`
`B. The Hough Patent ...................................................................................... 8
`
`C. The Kim Application ................................................................................. 9
`
`IV.
`
`THE PETITION FAILS TO SHOW A REASONABLE
`
`LIKELIHOOD THAT THE CLAIMS OF THE ‘674 PATENT ARE
`
`UNPATENTABLE ....................................................................................... 1 0
`
`DUGAN DOES NOT DISCLOSE MODIFYING AN EXISTING
`
`VALUATION ............................................................................................... ’12
`
`VI.
`
`HOUGH DOES NOT DISCLOSE MODIFYING “INFORMATION
`
`ABOUT THE DISTINGUISHED PROPERTY USED IN THE
`
`AUTOMATIC VALUATION OF THE PROPERTY” ................................ 16
`
`VII.
`
`THE CITED REFERENCES DO NOT DISCLOSE “OBTAINING
`
`USER INPUT FROM THE OWNER,” AS RECITED IN CLAIMS 1
`AND 2 ........................................................................................................... 18
`
`A. Hough ....................................................................................................... 19
`
`B. Dugan ....................................................................................................... 21
`
`VIII.
`
`THE CITED REFERENCES DO NOT DISCLOSE “OBTAINING
`
`USER INPUT” FROM “A USER KNOWLEDGEABLE ABOUT
`
`THE DISTINGUISHED HOME,” AS RECITED IN CLAIM 15 ............... 23
`
`IX.
`
`THE PETITION DOES NOT ESTABLISH A PRIMA FACIE CASE
`
`OF OBVIOUSNESS FOR THE COMBINATION OF DUGAN AND
`
`KIM ............................................................................................................... 25
`
`THE REFERENCES FAIL TO DISCLOSE A VALUATION
`
`PROCESS THAT PERFORMS THE SPECIFIC STEPS OF CLAIM
`
`1 ..................................................................................................................... 27
`
`XI.
`
`TI-DE REFERENCES FAIL TO TEACH OR SUGGEST VARIOUS
`
`ASPECTS OF THE DEPENDENT CLAIMS .............................................. 30
`
`A. Claims 3 and 4 .......................................................................................... 30
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`B. Claim 18 ................................................................................................... 31
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`C. Claim 30 ................................................................................................... 31
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`XII. CONCLUSION .....................................................................'........................ 32
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`TABLE OF AUTHORITIES
`
`Graham et al. v John Deere C0., 383 US. 1 (1966) .......................... 25
`
`KSR International Co. v. Teleflex Inc., 550 US. 398 (2007) ............... 25
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`LIST OF EXHIBITS
`
`ZILLOW 2001
`
`Jeffrey M. O’Brien, What’s your house really worth?, Fortune,
`
`Feb. 19, 2007, at 56, available at http://money.cnn.com/
`
`magazines/fortune/fortune_archive/2007/02/ 1 9/8400262/index.
`
`htm
`
`ZILLOW 2002
`
`Timothy J. Mullaney, A New Home Site on the Block,
`
`BusinessWeek, Feb. 7, 2006, http://www.businessweek.com/
`
`stories/2006-02-07/a-new-home-site-on-the-block
`
`ZILLOW 2003
`
`Rick Aristotle Munarriz, Pop Goes the Bubble, Feb. 14, 2006,
`
`http ://www.fool.com/investing/small-cap/2006/02/ 1 4/pop-goes-
`
`the-bubble.aspx
`
`ZILLOW 2004
`
`Motion for Sanctions Against MicroStrategy
`
`ZILLOW 2005
`
`Declaration of L. Payne in Support of Motion for Sanctions
`
`ZILLOW 2006
`
`Declaration of B. Taylor in Support of Motion for Sanctions
`
`ZILLOW 2007
`
`Declaration of J. Connors in Support of Motion for Sanctions
`
`ZILLOW 2008
`
`MicroStrategy's Opposition to Motion for Sanctions
`
`ZILLOW 2009
`
`Reply in Support of Motion for Sanctions Against
`
`MicroStrategy
`
`ZILLOW 2010
`
`Hearing Transcript Regarding Motion for Sanctions
`
`ZILLOW 201 1
`
`Final Office Action Mailed February 2, 2011
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`ZILLOW 2012
`
`Response to Final Office Action Filed on March 4, 2011
`
`ZILLOW 2013
`
`Fannie Mae Form 2055
`
`ZILLOW 2014
`
`Fannie Mae Form 2075
`
`ZILLOW 2015
`
`Uniform Residential Appraisal Report
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`Petitioner MicroStrategy, Inc. (“Petitioner”) filed a Petition for Inter Partes
`
`Review of US. Patent No. 7,970,674 (the “‘674 patent”) on October 26, 2012.
`
`After the initial petition was rejected, Petitioner filed a Revised Petition for Inter
`
`Partes Review (the “Petition”) on November 13, 2012. On November 19, 2012,
`
`the Patent Trial and Appeal Board (the “Board”) mailed a Notice of Filing Date
`
`Accorded to Petition.
`
`Zillow, Inc. (“Patent Owner”) submits this Preliminary Response in reply to
`
`the Petition. As discussed in detail below, Petitioner has failed to show that any
`
`claim of the ‘674 patent is likely to be found unpatentable. Accordingly, the Board
`
`should reject Petitioner's request for inter partes review for all grounds proposed in
`
`the Petition.
`
`I.
`
`Introduction
`
`Seven years ago, Zillow revolutionized the US. real estate market. Before
`
`2006, most people had only a vague idea of how much homes were worth—even
`
`homes within their neighborhood, let alone in a neighboring city, on the other side
`
`of the state, or anywhere else in the country. Valuations were the province of
`
`professionals in the real estate industry such as realtors and assessors, and of
`
`homeowners who hired a professional to appraise a home before putting it up for
`
`sale. Few others bothered getting a home appraised because the process generally
`
`required the appraiser to enter the home and might take days or weeks to return an
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`appraisal, along with a bill from the appraiser for hundreds of dollars.
`
`’674 Patent
`
`at 1:24—44. Until Zillow started “a real estate revolution,” as Fortune magazine
`
`wrote in a February 2007 cover article, good home valuation data was proprietary
`
`information:
`
`The real estate industry is based on what economists call
`
`information asymmetry, which simply means that one party
`
`(typically the seller) knows more about a product than the other
`
`(the buyer). It's an opaque market that encourages obfiJscation
`
`and leads to flawed pricing.
`
`The big idea behind Zillow is to make real estate more like a
`
`stock exchange, a transparent market where all information about
`
`every property is readily available, and as a result pricing is
`
`perfect.
`
`Jeffrey M. O’Brien, What’s your house really worth?, Fortune, Feb. 19, 2007, at
`
`56, available at http://money.cnn.com/magazines/fortune/fortune_archive/
`
`2007/02/19/8400262/index.htm (attached as Exhibit ZILLOW 2001).
`
`No one besides Zillow had even conceived of a service that would offer
`
`instant automatic valuations for nearly every home—and that would further allow
`
`users to augment the information used in its automatic home valuations to generate
`
`better estimates. To the extent that a person could find another automatic home
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`valuation service before February 2006, it would have provided a very rough
`
`estimate for a single home based on public database information about the home
`
`(and whatever recently sold properties it considered “comps”), without a way for
`
`that person or anyone else to provide additional home data.
`
`’674 Patent at 1:44—
`
`51; see also Timothy J. Mullaney, A New Home Site on the Block, BusinessWeek,
`
`Feb. 7, 2006, http://www.businessweek.com/stories/2006-02-07/a—new-home-site-
`
`on-the-block (“[Zillow’s] approach is unique. .
`
`.
`
`. Zillow's offering is more
`
`sophisticated than other real estate tools currently available online. .
`
`.
`
`. For
`
`example, once Zillow gives a basic home-price estimate, users can refine it by
`
`adding details Zillow may not know.”) (attached as Exhibit ZILLOW 2002).
`
`Zillow alone conceived, patented, and brought to market technology for the large-
`
`scale automatic valuation of homes, including refinement of its estimates using
`
`data obtained from individuals in addition to public records.
`
`Zillow’s technology was disruptive, and it was wildly popular. The Motley
`
`Fool investor site warned its readers the week following Zillow’s debut that it
`
`“makes many of the other models obsolete. .
`
`.
`
`. Zillow has disrupted the online
`
`real estate services market, probably irreparably. The rest of the market just
`
`doesn't realize it yet. .
`
`.
`
`. most companies fail to realize the magnitude of a startup
`
`with a better mousetrap.” Rick Aristotle Munarriz, Pop Goes the Bubble, Feb. 14,
`
`2006, http://www.fool.com/investing/small-cap/ZO06/02/14/pop—goes-the-
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`bubble.aspx (attached as Exhibit ZILLOW 2003). Fortune magazine captured the
`
`excitement that Zillow’s innovative new technology brought to the public: “Next,
`
`you realize that the information on your property is incomplete. What about the
`
`kitchen upgrade? Your new deck? The landscaping? All that work's gotta count
`
`for something. .
`
`.
`
`. So you tap in some modifications and watch your home's value
`
`rise.” O’Brien, supra. By developing a unique feature to leverage the knowledge
`
`of individuals as well as public information, Zillow is able to provide better home
`
`valuations. The innovative technology that Zillow developed—and patented—has
`
`democratized home valuations in the United States and helped Zillow become a
`
`popular and successful enterprise.
`
`In contrast, Petitioner MicroStrategy is a provider of business intelligence
`
`software to large corporations. Their business has little apparent connection to the
`
`online real estate technology covered by the ‘674 patent.
`
`In fact, recent court proceedings suggest that the Petition was filed purely to
`
`harass Zillow's litigation attorneys, Susman Godfrey, who are adverse to
`
`MicroStrategy in an unrelated patent case. Relevant documents are attached as
`
`Exhibits ZILLOW 2004-2010. In that case, MicroStrategy's General Counsel,
`
`Jonathan Klein, promised “to take action” against Susman Godfrey unless their
`
`client dismissed its lawsuit against MicroStrategy. Motion for Sanctions at 2, 5
`
`(Exhibit ZILLOW 2004); Taylor Dec]. 1] 4 (Exhibit ZILLOW 2006); Connors
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`Decl. 11 3 (Exhibit ZILLOW 2007); Payne Decl. 11 3 (Exhibit ZILLOW 2005). The
`
`follOwing month, MicroStrategy filed the Petition. Motion for Sanctions at 5.
`
`On December 12, 2012, Susman Godfrey filed a Motion for Sanctions
`
`requesting the judge to award sanctions against MicroStrategy for abuse of the
`
`legal system. Motion for Sanctions at 2. In response, MicroStrategy did not even
`
`deny that the Petition was filed in retaliation against Susman Godfrey; instead, they
`
`argued that they cannot be sanctioned for bad faith because the Petition is protected
`
`under the First Amendment. Reply in Support of Motion for Sanctions at 1.
`
`Regardless of whether MicroStrategy is protected from sanctions, misuse of
`
`the inter partes review process for petty harassment against attorneys in an
`
`unrelated case should not be encouraged. Furthermore, the Petition's proposed
`
`rejections fail to address multiple elements of the ‘674 patent‘s claims.
`
`Accordingly, the Board should deny all of MicroStrategy's proposed grounds for
`
`inter partes review.
`
`II.
`
`Background
`
`The ‘674 patent is directed to a system and method for using input from a
`
`property's owner “to refine an automatic valuation of the
`
`property.” ‘674
`
`patent, Abstract. Prior systems generally required a professional appraiser to
`
`“determine[] a value for a home by comparing some of its attributes to the
`
`attributes of similar nearby homes that have recently sold ('comps').” ‘674 patent,
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`1:33-37. To arrive at a value for a home, the appraiser “subjectively adjust[ed] the
`
`sale prices of the comps to reflect differences between the attributes of the comps
`
`and the attributes of the home being appraised.” ‘674 patent, 1:37-40. In some
`
`cases, automatic valuations could be performed; however, these‘automatic
`
`valuations were generated from a database (e. g., public information records) and
`
`“without input from each home's owner or other information not in the public
`
`database.” ‘674 patent, 1:45-49. Thus, prior to the ‘674 patent, a homeowner was
`
`faced with two choices for home valuation: 1) pay a professional appraiser, or 2)
`
`rely on an automatic appraisal system that could be using incomplete or incorrect
`
`information.
`
`In contrast, the ‘674 patent discloses a method for home valuation that
`
`makes the owner a direct participant in the valuation process. In particular, the
`
`method begins by displaying information relating to an automatic valuation of a
`
`selected property.
`
`‘674 patent, Figure 14. The automatic valuation may be
`
`generated using a geographically specific valuation model, such as using a forest of
`
`classification trees model.
`
`‘674 patent, Fig. 2, 4:47-1 1 :60.
`
`After the information for the automatic valuation is displayed, the owner can
`
`update information about home attributes that were used in generating the
`
`automatic valuation.
`
`‘674 patent, Fig. 14. The system then provides a new,
`
`refined valuation that reflects the adjustment to the information about the selected
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`property.
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`‘674 patent, Fig. 14. In some cases, the refined valuation is generated by
`
`applying the geographically specific valuation model to an updated set of attributes
`
`corresponding to the owner's adjustment.
`
`‘674 patent, 13:60-65.
`
`III. Brief Description of the Prior Art
`
`The Petition proposes rejections of the independent claims based on US.
`
`Patent No. 5,857,174 to Dugan (“Dugan”), US. Patent No. 5,414,621 to Hough et
`
`al. (“Hough”), and US. Patent Application Pub. No. 2005/0154657 to Kim et a1.
`
`(“Kim”), each of which is briefly described below. In addition, the Petition cites
`
`various other references to address dependent claims.
`
`A.
`
`The Dugan Patent
`
`Dugan describes real estate appraisal software for determining values for
`
`comparable properties. Dugan, Abstract. The software uses a point system
`
`(referred to as the Ideal Points System (“IPS”)) to quantify various “desirability
`
`factors,” such as location, neighborhood, facilities, etc. Dugan, Abstract, Fig. 2.
`
`During operation, the appraisal software uses the most recent sale price as
`
`the starting price for each comparable property. Dugan, 4:5-19. Each comparable
`
`property also has IPS points assigned to it either ahead of time or during the
`
`appraisal process. Dugan, 4:65-5:7, Fig. 4, 8:20-29. Similarly, IPS values are also
`
`assigned to the subject property. Dugan, 5:6-7. After IPS values are available for
`
`all properties, the software adjusts the sale price of each comparable property
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`based on a relationship between the comparable property's IPS values and the
`
`subject property's IPS values. Dugan, 525-25.
`
`Dugan does not disclose adjusting the price of the property being valued.
`
`Instead, after adjusting the sales prices of the comparable properties, the system
`
`simply “determine[s] the appraised value of the real estate,
`
`based on a
`
`comparison of the total IPS value for each comparable property and the total IPS
`
`value of the subject property.” Dugan, 08:50-55.
`
`B.
`
`The Hough Patent
`
`Hough discloses a method for determining values of comparable properties
`
`used in valuing a subject property. Hough, Abstract. In particular, Hough notes
`
`that the standard comparable method analysis (“CMA”) method lacks accuracy
`
`because it requires significant guesswork on the part of the appraiser. Hough,
`
`1:14-16. The Hough system improves on the CMA method by using tax
`
`assessment records and average appreciation to determine the value of each
`
`comparable property. Hough, Abstract.
`
`During operation, the user enters a set of comparable properties
`
`corresponding to a subject property. Hough, Fig. 2, 4:45-57. The system then uses
`
`tax records to determine each comparable property’s assessed value for property
`
`tax purposes. Fig. 2, 5:12-20. In some instances, the system adjusts the assessed
`
`value based on the average appreciation in the area in which the comparable
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`property is located. Hough, 5:67-6:5. The user may also adjust the comparable
`
`property's assessed value “to take into account the presence of any home
`
`improvements made after the tax assessor set the value of the property or other
`
`factors including sale terms.” Hough, Fig. 2, 5:21-24. The amount of the
`
`adjustment “depends on the type of home improvement and is generally set to the
`
`current market price to incorporate that feature into a newly built home.” Hough,
`
`5 :25-28.
`
`As with Dugan, the system of Hough is designed to adjust the values of
`
`comparable properties, rather than the subject property. Once the values have been
`
`adjusted, the system prints out the adjusted values so that “the user may use the
`
`comparative values to set the value of the subject property.” Hough, Fig. 2, 5:39-
`
`42.
`
`C.
`
`The Kim Application
`
`Kim discloses an appraisal system that uses information about subjective
`
`property characteristics to determine a valuation for a subject property. Kim,
`
`Abstract. After the appraiser enters the subjective property characteristics, an
`
`appraisal system determines condition information for comparable properties and
`
`estimates a value of the subject property based on the values and conditions of the
`
`comparable properties. Kim, Fig. 14, 111] 53-154.
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`Kim was cited during the original prosecution of the ‘674 patent. See, e.g.,
`
`Final Office Action Mailed February 2, 2011 at 2 (attached as Exhibit ZILLOW
`
`2011). However, the Examiner withdrew the rejection and did not dispute that
`
`Kim failed to disclose obtaining a refined valuation for a home based on input
`
`received “from the home's owner.” See Response to Final Office Action Filed on
`
`March 4, 2011 at 1 (attached as Exhibit ZILLOW 2012).
`
`IV. The Petition Fails to Show a Reasonable Likelihood that the Claims of
`
`the ‘674 Patent Are Unpatentable
`
`The Petition proposes three grounds for unpatentability for the ‘674 patent's
`
`independent claims:
`
`1. Independent claims 2 and 15 are purportedly anticipated by Dugan
`
`(Proposed Ground 2);
`
`2. Independent claims 2 and 15 are purportedly anticipated by Hough
`
`(Proposed Ground 3);
`
`3. Independent claims 1, 2, and 15 are purportedly obvious based on
`
`Dugan in View of Kim (Proposed Ground 1).
`
`As discussed in detail below, the Petition fails to show a reasonable
`
`likelihood that any of the claims of the ‘674 patent are unpatentable. In particular,
`
`1. Regarding Proposed Grounds 1 and 2, Dugan, either individually or in
`
`combination with Kim, fails to teach or suggest modifying a previous
`
`valuation, as recited in claims 1, 2, and 15;
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`2. Regarding Proposed Ground 3, Hough fails to disclose adjusting
`
`“information about the distinguished property used in the automatic valuation
`
`of the property,” as recited in claims 2 and 15;
`
`3. Regarding Proposed Grounds 1-3, the cited references do not disclose
`
`“obtaining user input from the owner,” as recited in claims 1 and 2;
`
`4. Regarding Proposed Grounds l and 2, the cited references do not disclose
`
`“obtaining user input” from “a user knowledgeable about the distinguished
`
`home,” as recited in claim 15;
`
`5. Regarding Proposed Ground 1, the Petition fails to establish a prima facie
`
`case of obviousness for the combination of Dugan and Kim;
`
`6. Regarding Proposed Ground 1, the cited references fail to disclose a
`
`valuation process that executes the specific steps of claim 1;
`
`7. Regarding Proposed Grounds 1 and 4, the cited references fail to disclose
`
`every element of several dependent claims, including claims 3, 4, 18, and 30.
`
`In addition, every dependent claim is patentable at least by Virtue of its
`
`dependency on a patentable parent claim. For clarity, the discussion below does
`
`not separately discuss these dependent claims.
`
`Because of these deficiencies, the Petition fails to show that any of the
`
`claims of the ‘674 patent are likely to be found unpatentable. Accordingly, inter
`
`partes review should not be ordered for any claim.
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`V.
`
`Dugan Does Not Disclose Modifying an Existing Valuation
`
`Proposed Ground 2 alleges that claims 2 and 15 are anticipated by Dugan.
`
`In addition, Proposed Ground 1 alleges that claims 1, 2, 5-10, 13-18, 25-27, 29-33,
`
`35-37, 39, and 40 are obvious based on Dugan in View of Kim. As discussed
`
`below, the Board should not adopt the proposed grounds at least because Dugan,
`
`either alone or in combination with Kim, does not disclose modifying an existing
`
`valuation.
`
`Claim 2 recites:
`
`2. A computer readable medium for storing contents that causes
`
`a computing system to perform a method for procuring
`
`information about a distinguished property from its owner that is
`
`usable to refine an automatic valuation of the distinguished
`
`property, the method comprising:
`
`displaying at least a portion of information about the
`
`distinguished property used in the automatic valuation of the
`
`distinguished property;
`
`obtaining user input from the owner adjusting at least
`
`one aspect of information about the distinguished property
`
`used in the automatic valuation of the distinguished
`
`property; and
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`displaying to the owner a refined valuation of the
`
`distinguished property that is based on the adjustment of the
`
`obtained user input. (emphasis added)
`
`Thus, claim 2 recites displaying an automatic valuation and then generating
`
`a new, “refined” valuation based on information received from the owner.
`
`Nothing in Dugan discloses, or even suggests, storing and modifying a prior
`
`valuation. Instead, Dugan merely discloses that the user can revise property
`
`records during the appraisal process. See, e.g., Dugan, Fig. 4, # 50. According to
`
`Dugan, the user may revise the record “if the record contains incorrect
`
`information” or “to input a new set of IPS values,” which are “point values
`
`indicating the score of the property in accordance with an Ideal Point System
`
`(IPS).” Dugan, 8:20-29.
`
`Thus, Dugan only discloses that the user can modify characteristics of a
`
`particular property to fix errors or change IPS point allocations. Dugan does not
`
`disclose retaining or modifying a previously generated valuation. In particular,
`
`Dugan does not disclose, or even suggest, displaying information relating to a
`
`previously generated valuation and generating a refined valuation based on an
`
`adjustment to the property, as recited in claim 2.
`
`Kim does not fill this gap. Kim simply discloses an appraisal system that
`
`uses subjective property characteristics to generate a property appraisal. Kim,
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`Abstract. The Petition does not, and cannot, argue that Kim discloses modifying a
`
`previously generated valuation. Accordingly, Petitioner has failed to show a
`
`reasonable likelihood of success for at least this reason.
`
`The Petition‘s arguments with respect to claims 1 and 15 fail for similar
`
`reasons. For example, claim 15 recites:
`
`15. A method in a computing system for refining an automatic
`
`valuation of a distinguished home based upon input from a user
`
`knowledgeable about the distinguished home, comprising:
`
`obtaining user input adjusting at least one aspect of
`
`information about the distinguished home used in the
`
`automatic valuation of the distinguished home;
`
`.
`
`automatically determining a refined valuation of the
`
`distinguished home that is based on the adjustment of the
`
`obtained user input; and
`
`presenting the refined valuation of the distinguished home.
`
`(emphasis added)
`
`Dugan fails to disclose “obtaining user input adjusting at least one aspect of
`
`information
`
`used in the automatic valuation of the diStinguished home” for the
`
`reasons discussed above. Dugan and Kim simply do not disclose receiving user
`
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`input to adjust a previously performed valuation. Accordingly, the Petition's
`
`arguments fail for claim 15, as well.
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`Claim 1 similarly recites:
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`1. A method
`
`for automatically determining a valuation for a
`
`subject home ..., comprising:
`
`presenting a display that includes an indication of a first
`
`valuation determined for the subject home ..., the indicated
`
`valuation being determined by applying to the indicated
`
`attributes a geographically-specific home valuation model is
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`based upon a plurality of homes near the subject home recently
`
`sold;
`
`presenting a display that solicits input from the owner
`
`that updates one or more of the indicated attributes;
`
`For the reasons discussed above, Dugan and Kim also fail to disclose these
`
`elements of claim 1. In particular, Dugan and Kim do not disclose presenting a
`
`previous valuation and soliciting information to update the valuation.
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`Accordingly, the Board should not adopt Proposed Ground 2 because Dugan
`
`fails to disclose every element of claims 2 and 15. Similarly, the Board should not
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`adopt Proposed Ground 1 because Dugan and Kim fail to teach or suggest the
`
`elements of claims 1, 2, and 15.
`
`VI. Hough Does Not Disclose Modifying “information about the
`distinguished property used in the automatic valuation of the property”
`
`Proposed Ground 3 alleges that claims 2 and 15 are anticipated by Hough.
`
`As discussed below, the Board should not adopt Proposed Ground 3 at least
`
`because Hough does not disclose modifying “information about the distinguished
`
`property used in the automatic valuation of the property.”
`
`Hough fails to disclose every element of claims 2 and 15. For example,
`
`claim 2 recites:
`
`2. A computer readable medium .
`
`.
`
`. to perform a method .
`
`.
`
`.
`
`,
`
`the method comprising:
`
`displaying at least a portion of information about the
`
`distinguished property used in the automatic valuation of the
`
`distinguished property;
`
`obtaining user input from the owner adjusting at least
`
`one aspect of information about the distinguished property
`
`used in the automatic valuation of the distinguished
`
`property; and
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`displaying to the owner a refined valuation of the
`
`distinguished property that is based on the adjustment of the
`
`obtained user input. (emphasis added).
`
`Thus, claim 2 recites steps of displaying information about the distinguished
`
`property that was previously used to generate an automatic valuation and allowing
`
`the owner to modify that information.
`
`Hough fails to disclose these features of claim 2. To the extent that Hough
`
`discloses an automatic valuation (which Patent Owner does not admit), it can only
`
`be the “assessment analysis routine” mentioned in block 28 of Figure 2. Hough
`
`discloses that this process computes comparative values of comparable properties
`
`“based on the [tax] assessment percentage and average appreciation information
`
`for the comparable properties, and the assessment percentage for the subject
`
`property.” Hough, 5:12-17. That is, the assessment is based entirely on tax
`
`assessment percentages and average appreciation. Hough further discloses that the
`
`system uses a simple set of mathematical equations to calculate a valuation based
`
`on the assessment and appreciation information. Hough, Figure 3, 5:50-6:17.
`
`Hough does not disclose displaying or adjusting this information. Rather,
`
`Hough discloses that the user can enter new information to “take into account the
`
`presence of any home improvements made after the tax assessor set the value of
`
`the property or other factors including sale terms.” Hough, 5:21-24. However, the
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`original valuation of Hough does not even consider the value of individual
`
`features; instead, the valuation is based solely on basic tax information and market
`
`statistics (i.e., average appreciation). In fact, the information used to calculate the
`
`initial value is determined by external factors (e.g., the local government) that
`
`could not be modified by the user under any conditions.
`
`Thus, Hough does not disclose (or even suggest) refining a valuation based
`
`on a change to information used in a previous valuation, as recited by claim 2. The
`
`Petition does not even attempt to address this language of claim 2, focusing instead
`
`on Hough's general disclosure of entering information about improvements. See
`
`Petition at 40. The Petition, therefore, fails to show a reasonable likelihood that
`
`claim 2 is unpatentable over Hough. Claim 15 includes similar language and is
`
`also patentable over Hough for the reasons discussed above.
`
`Accordingly, the Board should not adopt Proposed Ground 3.
`
`VII. The Cited References Do Not Disclose “obtaining user input from the
`owner,” as Recited in Claims 1 and 2
`
`Proposed Ground 1 alleges that claims 1, 2, 5-10, 13-18, 25-27, 29-33, 35-
`
`37, 39, and 40 are obvious based on Dugan in View of Kim. Proposed Ground 2
`
`alleges that claims 2 and 15 are anticipated by Dugan. In addition, Proposed
`
`Ground 3 alleges that claims 2 and 15 are anticipated by Hough. As discussed
`
`below, the Board should not adopt these proposed grounds at least because Dugan,
`
`Kim, and Hough do not disclose obtaining user input from a property's owner.
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`Dugan, Hough, and Kim describe systems to be used by an appraiser using a
`
`comparative market analysis method to determine a home valuation. The
`
`references do not disclose, or even suggest, obtaining input from the owner
`
`regarding the property, as recited in claims 1 and 2.
`
`A.
`
`Hough
`
`This failure is particularly stark in the case of Hough. As discussed above,
`
`Hough discloses a method for adjusting values of a comparable property in order
`
`to provide a better basis for an appraiser to value a subject property. Hough,
`
`Abstract. The appraiser then uses the adjusted comparative values to determine a
`
`valuation for the subject property. Hough, Fig. 2, 5:39-42. Thus, the person
`
`adjusting the property values is not specifically interested in those values —— rather,
`
`the adjustment is merely a means to the end of determining the value of the subject
`
`property. Nothing in Hough teaches that an owner of a house would be interested
`
`in adjusting the value of that house for use as a comparable property. The owner
`
`of a comparable property has no interest at all in such a task — only an appraiser or,
`
`at most, the owner of the subject property would be so interested.
`
`The Petition attempts to ignore this element of the claims. In particular, the
`
`Petition points to Hough's statement that a goal of the invention is to create a
`
`system that is “trusted by sellers, buyers, appraisers, bankers, and investors in the
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`secondary market of mortgages.” Hough, 1:33-36. According to the Petition, this
`
`means that owners could and would use the system. Petition at 50.
`
`This argument does not meet the legal standard for anticipation, which
`
`requires that the reference disclose every element of the claims. Petitioner has not
`
`shown this. Rather, the Petition states that the owner “may” use the appraisal
`
`system of Hough. Petition at 50. This is mere speculation. Even read in the most
`
`favorable light, the statement that a system is trusted by a certain group is not the
`
`same thing as disclosure that the system is used by that group.
`
`In fact, the system of Hough was clearly not designed to be used by owners
`
`for their houses. In particular, Hough discloses that the system prints out the
`
`adjusted values so that the comparative values can be used to value a subject
`
`property. Hough, 2:25-27. Hough does not explicitly describe how the user would
`
`value the subject property; however, the user would presumably do so using the
`
`standard comparative market analysis (CMA) method known in the art and
`
`described in the background of Hough, or a similar method. See Hough, 1:9-21. A
`
`lay person would not have the training or knowledge to determine a valuation
`
`using